Flipping Houses: How to Turn Trash into Treasure
Thursday, February 27, 2020, 6:00 PM | Leave Comment
In recent years, house flipping has become a major trend in the real estate market.
The range of people who have become involved in house flipping is diversified and vast. Experienced investors, as well as novices, have tried their hand at flipping houses based upon the roller coaster ride the real estate injury industry realized as a result of the crash in 2008.
At that time, property values plummeted, causing homeowners to fall into default and their homes to go into foreclosure. This was a prime opportunity for investors to buy at sheriff sales or short sales.
As a result of these types of transactions, investors were able to purchase properties at greatly reduced prices, giving rise to the “house flipping” craze which has dominated the real estate market in recent years.
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Sheriff Auctions
Information is readily available with regard to properties that are in foreclosure and up for sheriff auction. You can find his information in your local newspaper, by contacting the sheriff’s office or on the internet. Shrewd investors attend auctions with certified funds in hand prepared to purchase properties on the spot. You will need 10% of the final auction price in order to secure your purchase. You will have 30 days to pay the balance to the sheriff at which point you will receive a sheriff’s deed.
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Short Sales
You may also identify properties that are listed for a short sale with your local realtors since those homeowners likely are in arrears to the mortgage companies and may be willing to sell to you at a very low price.
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Knock On Doors
Many investors simply knock on doors of homes that are not well-maintained. These investors present contracts to homeowners on the spot offering cash for a deed in lieu of foreclosure. When it comes to searching for such investors online, its important to be aware to include you information about the location you want the house to be in.
For example, a realtor from San Antonio could be found by searching for we buy houses San Antonio. Many investors are willing to make cash offers on homes if the home fits their buying criteria. Written offers are presented to homeowners who are able to sell their home to investors within a short period of time, putting money in the pocket of a distressed homeowner and allowing the investor to purchase the property at a rock-bottom price.
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Renovate the property as quickly as possible
Renovations to the property require skilled contractors who have experience working quickly. Hiring handymen and random contractors is a major mistake since the idea of flipping homes is to be as efficient as possible. Try to acquire properties that require as little renovations as possible at first. When you are beginning this process, you do not want to purchase maximum profit when you sell or “flip“ the property.
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Flip the property immediately
List the property for sale when it is about 75% done so that by the time the property is finished your buyer is ready to close. Look for cash buyers who have cash on hand. You are looking for investors who have the money in the bank. You do not want to get into a contract with a buyer who needs to sell property in order to purchase your property.
There are plenty of investors who have the liquid assets available to purchase your property. This is one of the best ways to secure your final transaction. Having an attorney represent you at the time you purchase the property and at the time you sell the property also would be a wise decision. This will eliminate much of the risk and will provide you with an experienced resource to guide you through what certainly will be very tricky transactions.
This is only a short overview of the process of flipping homes. There are obviously many other layers that require extensive discussion. However, you may rely upon these basic steps as you begin your foray into the home-flipping market.
The best advice you can follow is to do your research on these properties and make sure that the problems that need to be addressed are not expensive since you do not want to purchase a money pit. Consult with and retain a local real estate attorney who is knowledgeable about real estate investing so that he or she may guide you.
Following the steps, your first home flipping experience should be profitable which will lead you to subsequent successful transactions in the future.
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